San Francisco’s Hot Real Estate Market

BE BACK IN THE 90s INLAND. >> AN UNDERGROUND BATTLE IS BREW MG SAN FRANCISCO. MARKET RATES ARE SKYROCKET AND WE’RE HEARING THAT THE PER SQUARE FOOT IS IN THE TRIPLE- DIGITS WITH SOME LANDLORDS ENTERTAINING MULTIPLE BIDS OUR CAREER AND TEG EXPERT JOINS US WITH A REAL ESTATE BROKER WITH KM COMMERCIAL TO EXPLAIN WHAT IS SHAPING. GOOD MORNING KIM. >> GOOD MORNING MARTY. MARTY SAYS BATTLE IS BREWING AND WE’RE NOT TALKING ABOUT A PHYSICAL BATTLE, BUT STILL A BRALT FOR REAL ESTATE IN SAN FRANCISCO, RIGHT? >> ABSOLUTELY. SO CURRENTLY A DOGFIGHT GOING ON AS MARTY MENTIONED. I’M A COMMERCIAL REAL ESTATE BROKER. >> AND WHAT IS REALLY HAPPENING BETWEEN THE FOUNDERS? IT’S LIKE THEY ARE BATTLING AGAINST EACH OTHER JUST TRYING : TO VIE FOR OFFICE SPACE HERE. THERE REALLY ISN’T THAT MUCH. >> IT’S HIGHLY COMPETITIVE. HIGH PRICES INCREASING. THERE IS NOT A WHOLE LOT OF x/(C SPACE AVAILABLE. SO ONE SPECTRUM YOU HAVE YOUNGER GROUPS 10-15 PEOPLE LOOKING TO GROW OUT OF SHARED WORKING PLACES, CO-WORKING [ç[ç;DoçwMk3ï7 Ou]JQí8INGCt’NNN3 FEET. ON THE OPPOSITE SIDE YOU HAVE LARGER GROUPS LOOKING TO GET pL WITH ONLY TEN OR SO OPTIONS CURRENTLY. >> FIVE OR JPJPJA!3tSIX BUILDI THEY GET THE BIG TOWER BUILT. >> THEY HAD TO BUILD A TOWER TO HOLD THEIR EMPLOYEES IN SAN FRANCISCO. >> I BELIEVE WE HAVE A GRAPHIC THAT WE WANT TO PULL OUT THAT SHOWS ALL OF THE VACANCY RATES IN SAN FRANCISCO AND WE DON’T ACTUALLY HAVE THAT GRAPHIC. SO I’M JUST GOING TO TALK ABOUT THE VACANCY — THERE WE GO. LOOK AT THAT. RATES IN SAN FRANCISCO, AND kw0# WE’RE NOT QUITE IN TRIPLE- DIGITS YET, BUT SOMA, 4% VACANCY RATE. WHY IS THAT? ( JPJPJ WHY IS THAT AREA SO POPULAR? >> SO THAT BROKE JARGON 4% VACANCY RATE BASICALLY MEANS IN THE ENTIRE SOMA NEIGHBORHOOD ONLY 4% OF ALL úe VALUABLE. WITH LOW INVENTORY COMES HIGH DEMANDS AND WE’RE SIGH SIEG SPACES IN $85 PER SQUARE FOOT IN SOMA. >> I -6i┓ú■x,ap!]+xHw BECAUSE PEOPLE ARE ABLE TO POACH DEVELOPERS AND OTHER EMPLOYEES. YOU ( JPJPr■k■ko#zOçów3t(SEE TH AND WHATEVER LATAH. . >> SOMA HAS 50% OF TECH AND ?Em;$-Ñw3■ç7s■■mmçnb■3■çT■y?7?9F AND BART. >> IF YOU ARE ACTUALLY ON A BUDGET, WHAT ABOUT THE MID- MARKET AREA? 18% VACANCY RATE AND MISSION BAY AT 5%. ARE THOSE DESIRABLE AREAS OR BE LOOKING AT? >> BIG MARKETS TWITTER, ADOBE, DOG PATCH WE’RE SEEING A LOT OF OWNER-USER INVESTORS GETTING INTO THE MARKET, BUYING WAREHOUSE SPACE AND TRYING TO CONVERT INTO OFFICE USE. >> SO THEY ARE REZONING THERE. THEY ARE ABLE TO LOBBY THE CITY TO REZONE IN THE AREA. Xfñf5ín],7BXp(,!e?LkçLOT”Z?dpwyX PATCH SOON. >> & IN SAN FRANCISCO THAT PEOPLE ARE EVEN LOOKING AT THE BAYVIEW DISTRICT. CANDLESTICK PARK WHICH WE HAVE SEEN A LOT OF VIOLENCE THERE THIS SUMMER AND PROTESTS THERE YESTERDAY AND PEOPLE LOBBYING THE CITY TO HELP WITH THE POVERTY AND THE VIOLENCE THERE. THIS COULD ACTUALLY BE REALLY GOOD NEWS FOR THAT AREA IF COMPANIES WANT TO GO THERE. >> IT’S HARD TO BEAT A DOLLAR A SQUARE FOOT. >> ARE YOU SERIOUS? >> A DOLLAR A SQUARE FOOT IN THE BAYVIEW AREA. WE HAVE HEARD RUMORS AND A LOT OF TENANTS ARE LOOKING FOR LARGER SPACES IN THESE AREAS. >> WHAT ABOUT THE MISSION AREA? SO I WORKED AT A TECH BLOG AND WE WORKED OUT HOUSE. AND I KNOW WE SHOULD HAVE GOTTEN OFFICE SPACE; RIGHT? >> @ [ LAUGHTER ] >> GOOGLE TRIES TO GET IN THERE AND THEY FAILED. >>Reporter: THERE ANY COMPANIES THAT ARE ABLE TO INFILTRATE THE AREA. ?E GOING IS MT:::::ñ-tC[tXáóoçF AND TOOK 250,000 SQUARE FEET IN ONE MARKET. THEY DID HAVE PROBLEMS GETTING INTO THE MISSION. y7%( PP8d IT’S A HIGHLY CONTROVERSIAL SUBJECT JUST BECAUSE OF THE NEIGHBORHOOD. BUT THE ZONING IN THE MISSION IS DIFFICULT. YOU YzARE LOOKING AT MORE RESIDENTIAL, MORE RESIDENTIAL, RETAIL AND NOT SO MUCH COMMERCIAL USE. WOERóm■ç5NOT ‘éA6OLE HsNNNNNNNç& A(■ç&.7Z